New MountainFinance Corp. priced an offering of $35 million of additional 5.00% unsecuredconvertible notes due 2019.
The notes were priced at 100.75% of par value, plus accruedinterest from June 15. The notes form a single series with the $115 million ofthe 5.00% unsecured convertible notes due 2019 in June 2014.
The company also granted the underwriters an option topurchase up to an additional $5.3 million of notes.
Subject to closing conditions, the offering is expected toclose Sept. 30.
The notes will be convertible into New Mountain commonshares based on an initial conversion rate of 63.2794 shares per $1,000principal amount of notes. This is equivalent to an initial conversion price ofapproximately $15.80 per common share, representing a 14.4% conversion premiumover the company's Sept. 26 common stock price of $13.81 per share. Theconversion price will not be reduced for quarterly cash dividends paid tocommon stock holders at or below the rate of 34 cents per share, subject toanti-dilution and other adjustments.
The notes will mature June 15, 2019, unless previouslyconverted. Interest on the notes will be payable semiannually in arrears onJune 15 and Dec. 15 of each year, starting Dec. 15.
New Mountain intends to use the net proceeds to repayoutstanding debt under its credit facilities. Through re-borrowing under suchcredit facilities, the company plans to make new investments and use availablecapital for other general corporate purposes, including working capitalrequirements.
Wells Fargo Securities LLC, Goldman Sachs & Co. andMorgan Stanley & Co. LLC are serving as joint book-running managers for theoffering.